(Alliance News) – Stock prices in London opened mostly lower on Monday, while UK house price growth has steadied as the market improves for first-time buyers.
Elsewhere, a Royal Air Force airfield in Cyprus has been hit by a drone, believed to have been launched before UK Prime Minister Keir Starmer gave the US permission to launch military strikes against Iran from British bases.
Nationwide reported that UK house prices rose 1.0% on an annual basis in February, surpassing FXStreet-cited consensus for a 0.7% rise, and unchanged from January’s growth rate. Prices rose 0.3% on-month in February, also unchanged from January, and in line with the consensus estimate.
“Looking across 2025 as whole, total housing market transactions were 10% higher than in 2024…improved affordability and an easing in credit availability has helped to support first-time buyer activity, with mortgage completions up 18% year on year,” Nationwide Chief Economist Robert Gardner said.
The FTSE 100 index opened down 102.50 points, 0.9%, at 10,808.05. The FTSE 250 was down 397.15 points, 1.7%, at 23,360.00, and the AIM all-share was down 2.60 points, 0.3%, at 816.93.
Travel companies’ stocks fell on Monday morning. On The FTSE 100, British Airways parent IAG was down 6.0%, while easyJet traded 3.8% lower.
On The FTSE 250, Wizz Air was down 6.3%, while travel retail shop firm WH Smith fell 6.9%. Trainline was down 2.8%.
Officials are understood to be working on plans for the potential evacuation of more than 100,000 Britons from the Middle East.
Foreign Secretary Yvette Cooper indicated that 102,000 British nationals have registered their presence in the region.
She said a total of about 300,000 British citizens are in Gulf countries targeted by Iran.
British nationals are being advised to follow the instructions of local authorities and monitor the Foreign Office’s travel advice, which officials expect to change rapidly.
The Cboe UK 100 was down 0.9% at 1,076.55, the Cboe UK 250 was down 1.6% at 20,643.57, and the Cboe small companies was up 0.2% at 18,520.94.
Jet2 was down 3.8%, while Hostelworld fell 3.1%. Ryanair was down 3.7% in Dublin.
In global news, the US-Israeli military operation against Iran and Tehran’s retaliation are disrupting global maritime traffic, including oil tanker transports, AFP reports.
The grounding of ships around the Gulf and the paralysis of the Strait of Hormuz, a critical narrow waterway bordered by Iran and Oman, represent a significant upheaval for a wide range of sectors beyond hydrocarbons, including fertilisers and polymers.
Also, a kamikaze drone struck the RAF Akrotiri airfield in Cyprus hours after Prime Minister Starmer announced that American forces would be allowed to use British bases to strike Iranian missile sites in response to the barrage launched by Tehran against countries across the Middle East.
Officials said RAF Akrotiri in Cyprus was continuing to operate as normal despite the attack but family members of personnel had been moved away from the base as a precaution. Around 300,000 Britons are believed to be in countries targeted by Iran, with 102,000 registered with the Foreign Office for updates as officials examine all options, including a potential mass evacuation.
Defence and oil stocks led the FTSE 100 on Monday as the conflict continues. BAE Systems and Babcock rose 7.9% and 2.6% respectively, while Shell and BP rose 4.2% and 2.8%.
Brent oil was quoted at USD79.01 a barrel early in London on Monday, up from USD72.58 late Friday.
However, Swissquote’s Ipek Ozkardeskaya noted: “With the initial shock behind, prices are retreating somewhat as investors readjust risk calculations and consider that global oil reserves could cushion part of the disruption — at least temporarily.
“Also, nearly 70% of global oil production comes from outside the Middle East and does not need to transit the Strait of Hormuz. US shale — which accounts for about 60–70% of US oil production, and more than 20% of global oil supply — could also help mitigate the impact.”
SPI’s Stephen Innes added: “The situation is fluid, but so far the biggest market fear of the targeting of energy infrastructure and the enforced closure of tanker routes has not happened.
“Despite fears of an oil shock, the global economy may not be severely impacted due to factors such as the US shale revolution and the decent supply of oil currently available.”
“The middle path is the one markets are quietly pricing,” Innes added. “The Strait is not formally closed. Tehran says it has no intention of doing so. Yet commercial shipping pauses anyway. Not because of missiles. Because underwriters yank war risk cover within hours.
“The binding constraint is not a naval blockade. It is the insurance market.”
Gold miner Endeavour rose 3.4%. Other miners also rose, with Rio Tinto and Fresnillo up 0.4%.
Gold was quoted higher at USD5,408.12 an ounce against USD5,180.61 on Friday.
In Asia on Monday, the Nikkei 225 index in Tokyo was down 1.4%. In China, the Shanghai Composite was up 0.4%, while the Hang Seng index in Hong Kong was down 2.1%. The S&P/ASX 200 in Sydney closed marginally higher.
China called on Monday for a ceasefire and diplomatic talks to end the conflict in the Middle East as it stretched into a third day.
“The most urgent task is an immediate cessation of military operations and preventing a spread and spillover of conflict,” foreign ministry spokeswoman Mao Ning told a news conference, urging “a resolution through dialogue and negotiation”.
Beijing warned its citizens last week against travelling to Iran for the time being “in light of the current security situation”.
In the US on Friday, Wall Street ended lower, with the Dow Jones Industrial Average down 1.1%, the S&P 500 down 0.4% and the Nasdaq Composite down 0.9%
The yield on the US 10-year Treasury was quoted at 3.97%, narrowing from 4.03%. The yield on the US 30-year Treasury was quoted at 4.64%, narrowing from 4.68%.
In European equities on Monday, the CAC 40 in Paris was down 1.8%, while the DAX 40 in Frankfurt was down 2.3%.
The pound was quoted lower at USD1.3337 early on Monday in London, compared to USD1.3513 at the equities close on Friday. The euro stood lower at USD1.1711, against USD1.1792. Against the yen, the dollar was trading higher at JPY157.08, compared to JPY156.20.
Still to come on Monday’s economic calendar, various countries have manufacturing PMI releases including the UK, Canada and the US.
By Emma Curzon, Alliance News reporter
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